BANGKOK – Thailand Military backed National Legislative Assembly (NLA) yesterday approved a draft memorandum of understanding to be signed with China for the development of a dual-track railway system, with the guarantee that China will not be allowed to use the land along the railway.

Transport Minister Prajin Juntong sought approval for the MoU with China to build a double-track standard-gauge railway covering the 734-kilometre route linking Nong Khai, Khaeng Koi and Map Ta Phut and the 133km Khaeng Koi-Bangkok route. The cost of the project has not yet been evaluated.

The deal on the railway project was made last month when Prime Minister General Prayut Chan-o-cha visited China to attend the Asia-Pacific Economic Cooperation Summit.

The junta had mapped out a strategic plan for land transport in July, and Deputy PM Prawit Wongsuwan together with Deputy Foreign Minister Don Pramudwinai and junta adviser Somkid Jatusripitak visited China in October to pave the way for this deal. The interim Constitution’s Article 23 says NLA approval is required for any agreement with a foreign country that might have implications on economic development.

The NLA endorsed the MoU draft with 187 votes, while seven abstained.

The MoU will be effective for five years after being signed, indicating that China will be responsible for construction and will develop the railway project. China will also conduct a feasibility study and prepare the project, Prajin said. The government wants the construction to begin by 2016, he said.

Under the MoU, Thailand and China will jointly set up a task force to implement the agreements for the project. The Transport Ministry will be in charge of the project on the Thai side, while the Chinese National Development and Reform Council will represent the Chinese side, he said.

NLA members voiced their support for the project and the MoU, which they said would benefit both countries and speed up the progress for infrastructure development in Thailand.

NLA member Somboon Ngamlak said Thailand desperately needed an advanced rail system that is safe and reduces the cost of logistics.

He said logistics costs in Thailand were higher than those of other countries in the region, noting that Singapore’s logistics cost was only 8 per cent of gross domestic product, and Malaysia’s 13 per cent, but Thailand’s was as high as 15 per cent of GDP.

“We cannot compete with other ASEAN countries,” he said.

Though most NLA members only saw positive aspects of the project, Paisan Sitabutr asked how this project would affect people; how the private sector would participate; how such an expensive project can be examined; and how technology transfer would take place.

Prajin said the military-led regime guaranteed that the project would not have any long-term negative effects on people.

“I insist that we don’t give China the right to utilise land along the railway,” he said.

Right of land usage is worrisome, as many rail-investment projects proposed by Chinese investors in the region failed to materialize after Beijing demanded usage rights to too much land in relation to investment.

The MoU, which should be signed soon after the NLA approves it, does not provide details about the investment and financial arrangements for the project. Prajin said the Finance Ministry was considering the financial side and would make a decision later on whether the project could be a joint venture in accordance with Thai laws.

Deputy foreign minister Don said the MoU would be signed with China late this month.

Inheritance Bill

The National Legislative Assembly has also rescheduled deliberation on the inheritance and gift tax bill from yesterday to December 18, as it needs time to carefully consider it.

Last month, the Cabinet approved the draft bill, whose main provision would levy a 10-per-cent tax on bequeathed estates worth more than Bt50 million.